Ponzi and US Treasury Bills?

News Bite 1
Even the most sophisticated investors put their faith in Bernard Madoff, the New York City financier recently accused of running a $50 billion Ponzi scheme. That breach of trust has damaged the broader markets, Professors Maurice E. Schweitzer and G. Richard Shell say.

News Bite 2
Obama signed off on the record breaking budget.

News Bite 3
Hillary Clinton visited Japan and China in her maiden trip overseas as the new Secretary of State.

Piecing all these events together, I would speculate as follows:-
The US budget deficit needs to be financed by some real US money as the printers are already working overtime trying to meet the delivery to 3 US car manufacturers after doing the AIA's order.

Where to find the real existing US dollars? Oh yes.. the Chinese and the Japanese have plenty of them. So Obama asked Hillary to go borrow some zillions from them in her maiden trip.

If the zillions don't turn up soon, the US government could be accused of doing the next Ponzi thingy with trillions of Treasury bills waiting for their promised interest and redemption?

Never say never. Well at this moment, the above is just Edgar's fertile imagination at work.

Two Singapore icons

Could the two Singapore corporate icons be around at the end of this financial storm?

At this rate that they are going, I really don't think so.

One is a retailer (a premium one, it called itself) selling health-related equipment that other people make and had tried to play the M&A game with the Americans using mostly other people's monies. In yesterday's BT, the last of few hundred millions invested in that foreign land has been erased from its balance sheet.

The other has lost its way since its signature sound card. The company is burning away the USD$100mio won from Apple a few years ago trying to produce and sell products that the whole world knows how to make. After closing down its online initiative, they have just closed down their retail initiative. Sold and lease back their HQ. Sold their online music store.

Come on, guys. Are you running out of ideas? The market will punish harshly!

Are managed funds any good?

Are active fees actually yielding any outperformance, let alone absolute returns? A question asked in BT dated Feb 12, 2009.

Based on public data, for a 3-year period to end January, Asia ex-Japan funds:-

• Asia ex-Japan funds lost negative 9% on an annualised basis, compared to
• negative 11% by the MSCI Asia ex- Japan index.

Over a 5-year period,

• the funds lost one per cent on an annualised basis, compared to
• the index loss of 0.13%.

Over 10 years,
the funds' record shows an annualised return of 3.49% among funds, against
2.66% for the index.

Based on the above numbers ==> the index has beaten the fund managers in 2 of 3 categories.

Have you started your soul-searching over the value of active management ie. are the fund managers any good? I have. If you refer to my earlier posting, I am concluding just that. I can't PERSISTENTLY beat the market in the long run.

I won't be surprised that high networth clients are preparing to show fund managers / private bankers the door, replacing their allocations with no-frills index funds.

Should part of sovereign wealth of a nation be in no-frills index funds too?

Temasek portfolio down 31% - My lesson

r u a pedestrain?

The sub-headline said - "Measured against other indexes, Singapore's two state-owned investment companies did better."

What is that sub-headline supposed to mean? Shouldn't the Temasek team, with the best of qualification, experience and market knowledge/access, be doing better than any index?

May I cite the following info for my record:-
Temasek Holdings - down 31%
MSCI World Index - down 38%

The 31% drop is equivalent to $60bio drop to $127bio.

Looking at own potfolio which suffered a bigger decline than MSCI's and given the above information, what shall be my future investment strategy?

Since the best fund managers at Temasek team are beyond my reach, the next best option would be to invest in MSCI World Index Fund. Since it is an index fund, it should be quite efficient. Another plus point is that I am also able to bring my future portfolio performance closer to that of Temask's.

P/S - Fool.com's strategy of investing in the widest index fund possible. It is now the time for me to it seriously.

Economic nationalism economic reality or protectionism?

a woman and her seated dog = lack of civic mindedness

May I quote from editorial page in BT dated Feb 4, 2009,

"As the global economic crisis continues to unfold, there are ominous signs of a rise in economic nationalism and even overt protectionism.

In the United States, the economic stimulus package is studded with 'buy American' provisions, for products ranging from steel to worker uniforms to computers.

In the European Union, authorities are directing banks to lend to domestic entities and are drawing up plans to protect their own 'national champions'.

Amid a rising wave of labour unrest, there are calls to protect jobs for domestic workers as against foreigners - and this is evident in Asia too."

Is protectionism symptom apparent in the recent Singapore's budget too?

Is the Jobs Credit scheme inadvertently say "buy Singaporean"?

What if the 9% wage subsidy or negative tax of Jobs Credit scheme inadvertently improve our flexibility to be "price competitiveness" for our exports? Will it develop into a full fledged farm subsidy debates between US and Europe? Don't think so.

"buy Singaporean" - Is it the same as sell foreign talents/workers? Are we forsaking our ethos on meritocracy?

A coffee shop discussion with an informed friend gave me an alternate interpretation. The Jobs Credit Scheme is an attempt to keep a core group of Singaporeans to continue to exercise their respective trade, business, profession and vocation over the duration of current financial storm. So that when the storm passes, this group of survived Singaporeans (ie. with the stronger genetic code) can go forth and multiply ie. sustaining Singapore Inc.